If you surrendered your house, where did you live?

[mslaw]

We are in quite a pickle. We are in the process of gathering all our documents to file Ch7 and we will be surrendering our house. We are over 40K upside down. We have outrageous interest rates with bad credit already and cannot get financed for a better rate. Right now our 1st mortgage is at 7.25% and our 2nd mortgage is at 8.75%. Eeek. They really hosed us and we were stupid.

So we are walking away.

However, now leaves the mess of where we are going to live. My inlaws offered to buy a house and mortgage it and let us live there until a couple years down the road when we could buy it from them. They own their home free and clear and have no debt. However, upon researching this, they found they cannot do that because if they take out a mortgage they have to list that house as their primary residence and it won't be. So there goes that plan.

I've been crying on and off all day because at this point, it looks like we will be homeless and have to live with my inlaws in their small 3 bedroom home. We have 5 kids by the way. Just feeling very hopeless at this point. We live in a small town with very little rentals so not a lot of options.

Thanks.

[mslaw]

Forgot to mention, we are through a small lender (savings and loan) and they will foreclose on us very quickly. Last year, we ended up 3 months behind and they sent out loan to a lawyer and we had to pay to get out of that mess just to stay here. So I have no doubt that within 3-4 months we won't have a house.

[keepmine]

I've been on this site and others for a long time and never seen anyone left homeless due to a bk.
Time to get proactive and start looking for rentals. All you need is one "yes".

[ValleYum]

Why not offer to rent your in-laws house and let them buy another one to live in? After a year or so y'all could switch houses... mortgage company won't care then as long as they get paid. Just my two cents. I wish you good luck, please keep us posted. {{{{hugs}}}}

[btbeme]

I'm not sure that your in-laws would have to list that home as anything. Since they do not have a mortgage loan on their house, I believe that most banks wouldn't consider their paid-for home as a liability. And nobody peeks in the windows to see who is living where. Talk to someone other than the drone at the window of the bank. In fact, I'd approach a mortgage broker and let him find a bank that would make the favorable loan.

More than one way to skin a cat, too. They could borrow against their current house (favorable rates for being their primary residence if the bank actually cares) to purchase the other, then sell it to you in a few years and pay off the loan on their current residence.

In any case, don't be too sure that anyone is foreclosing quickly. KY is a judicial state, meaning that the courts - not the bank - determine when the house is sold. A judicial system can often be delayed for reasonable causes. Things only move quickly when there is no push-back; i.e. if you fail to legally answer the Lis Pendens when it is filed against you. I'd suspect that any foreclosure in KY would take 5-6 months minimum. If it moves faster than that it would be because it wasn't challenged (which is up to you).

5 to 6 months of saved payments makes a pretty nice security deposit for a rental, even with a fresh BK on your file.

[Drazil65]

Yeah, you are more than likely looking at 6 months (or close to) in Kentucky. Start looking for a rental or at least you have time to work things out with your inlaws. It sounds worse than it really is, everything will work out. Good luck!

[mslaw]

Thanks everyone! I appreciate the advice. This is all so super stressful. I just read on here yesterday that we needed to close our bank account and start a new one (because we have a ton of auto payments set up) and something so little set me into a tailspin. I'm just really on the verge of snapping. Losing this house, finding a new one, small community, back to relying on my inlaws after 13 years of marriage, no savings, bankruptcy, all these changes is just a lot.

[frogger]

Just a wild thought for you......... if you're with a small lender, perhaps you can ask them to rent the property back to you for the time that it takes to sell the house. You pay rent, you keep up the house, it's a win/win situation for everyone.

If the house goes vacant, the crack/meth heads will strip it and leave the lender with a worthless piece of property.

If you don't ask..........

[btbeme]

Losing this house, finding a new one, small community, back to relying on my inlaws after 13 years of marriage, no savings, bankruptcy, ...

... a fresh start, no debt, lessons learned, a family that loves you far beyond simply offering a domicile, and a forum full of people who have all felt just like you do at one time or another.

Let those other feeling pass, and look for that brightly lighted path to your future. It's there, just beyond the horizon. Trust us.

[Drazil65]

It is alot of change and its stuff that you never in a million years thought would be you. Its real life stuff and it is your new normal, it is your life right now. BUT, it does not define you as a person, it does not dictate where you will be in a year unless you give into the gloom and doom. Learn your life lessons and be thankful for them, yes be thankful to get back to the beginning and start over. Hard, yes, worth it, oh yes.

You are not alone in this journey for sure and it is what it is, deal with it. Hold your head up and go about the business of picking yourself up and moving forward, this is your life and your decision, no ones business period. The new beginning is a great way to alter the path from the last one. Things like living on cash, buying beater cars with cash so you have no payments, rent for a while and do not be a hurry to buy a house again as long as your and yours are healthy and are together, make life simple. There is so much to be said for a simple life because that is when you can truely smile from the inside, its a wonderful lesson to pass on to your kids. The simple life, there is so much to be said for it!

[tobee43]

I've been on this site and others for a long time and never seen anyone left homeless due to a bk.
Time to get proactive and start looking for rentals. All you need is one "yes".

we had a truck and no place to go...after 33 years in our house we were homeless for about 4 months.


renting property from your in laws could cause them a problem because they would have to claim the income etc.

someone mentioned the paid for house as a liability, or maybe i misunderstood, it should be considered an asset. they should be able to buy a house if they own one free and clear and by the way, in the country you are in fact allowed to have more than ONE primary residence. it's where you file your taxes...it's like the rich LOL!!! they have a home 1/2 the year here and then 1/2 the year there. you are allowed to do that. so, i don't know who is telling them they can't buy it unless it's their primary residence, that's simply not true. with respect to a mortgage income property loans are at a higher rate. but i know this, i know at least 3 people that own more than 1 home and and deem them as their primary residences. the bank can't say where or which house they should live in.

also, maybe they could co-sign a lease on a place for you until you get on your feet. if they were willing to buy a place, i'm certain they would or could do that for you, you think?

best of luck, something will turn up. it did for us, we had to rent from a relative for almost a year when we lost our house after being in hotels for a while. it was the worst tie in our lives or so we thought. all i can say, is things can even be worse then this, so it will be ok, you will find a place to live.